FTX Recovery Trust Sues Genesis for $1.15B

The FTX Recovery Trust sued Genesis Digital Assets, its affiliates and co‑founders in U.S. Bankruptcy Court in Delaware seeking to reclaim $1.15 billion in allegedly fraudulent transfers tied to former CEO Sam Bankman‑Fried. The complaint alleges Alameda Research caused purchases of Genesis equity using commingled and misappropriated funds largely sourced from FTX customer deposits, including more than $500 million for preferred shares and roughly $550.9 million sent directly to co‑founders Rashit Makhat and Marco Krohn. The trust says those investments ignored multiple red flags—Kazakhstan’s energy crisis, unaudited records, reports of money‑laundering links and a suspicious valuation spike—and therefore constitute avoidable fraudulent transfers under U.S. bankruptcy law. Genesis, a Kazakhstan‑based bitcoin miner that expanded amid China’s mining exodus and benefited from political connections, now faces a civil claim seeking repayment, fees and interest and possible unwinding of the pre‑bankruptcy transactions. The suit is one of several large clawback efforts by the FTX estate, following a recent action involving Binance, as the trust seeks to maximize recoveries and prepare creditor distributions.